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Streaming Media East 2018 [8-9 May 2018]
Live Streaming Summit [8-9 May 2018]
Content Delivery Summit [7 May 2018]
Streaming Forum [27 February 2018]

The State of Media and Entertainment 2018
Netflix and Amazon sit atop the cord-cutting throne. Do Disney, Apple, or any other challengers have what it takes to compete?

Another element that Apple is rumoured to be in negotiations about is premium video on-demand, which involves films being made available at a high price point (£50–75) within a few weeks of their cinematic release. Not only could this potentially be massively disruptive to the cinema industry in general, but it could create a completely new stream of revenue for Apple’s on-demand platform.

To really up its game, however, Apple is looking to make a “transformative acquisition,” according to the New York Post. The company has had discussions with both Paramount and Sony in the past, though there was apparently no interest in Fox, which was acquired by Disney at the end of 2017. Apple certainly seemed to have ruled out a Netflix acquisition, as Eddy Cue said at Recode earlier in the year, when it was suggested it might buy a content company, “we might be better buying somebody or doing that, but that’s not what we’re trying to do.”

You’d never bet against Apple and its huge war chest, but to really stand a chance of challenging the two incumbents, the company must look to make some significant acquisitions and produce a significant amount of exclusive content to ensure it is not left behind.

Apple began creating original content in 2017, and is assembling talent to develop its own streaming video service. 

Social Video Struggles to Compete

In the social media space, Facebook and Twitter are really employing two very different content strategies. With the launch of Watch in the U.S. in August, Facebook is trying to form an ecosystem of creators from a number of different areas who originate their own shows, around which communities can be built. Twitter is looking at more of a Netflix-style model, creating new partnerships with content owners to livestream their video content or develop unique video content based on partner expertise.

Facebook is making an interesting move with Facebook Watch, as many publishers of content have found that Facebook Live has not delivered the returns they expected in either user interaction or advertising revenue. Interestingly, this is where brand-created content has proven much more effective.

Facebook head of global creative strategy Ricky Van Veen offered encouragement for publishers when he told The Hollywood Reporter that, so far, Facebook has been surprised by the length of viewing on Watch, with the average viewer tuning in to a show for 15 minutes. “It’s a behaviour that we didn’t really know if it would exist,” he said. “We have yet to see the upper limit of how long it will go.”

The emphasis is still on Watch as a user-driven platform, with comments and interaction with viewers being the most important component. This in turn is also seen to be driving more “intentional viewing” than originally expected.

But while the social media giant will continue to commission shows to seed growth, it will remain an ad-driven platform rather than a subscription-based service.

Watch is planned to launch internationally at some point in 2018, with the UK likely to be one of the first markets to launch outside the U.S. But Facebook is being cautious with the rollout as Daniel Danker, product management director at Facebook, told The Hollywood Reporter at MIPCOM: “First and foremost we have to learn from what we have just rolled out, understand how people’s behaviours are changing, what’s working, what we can do better and what we can do to make the experience better for publishers. That will guide our timeline.”

Twitter’s strategy of partnership and rights acquisition is noticeably different. Despite being outbid by Amazon for the rights to stream Thursday Night Football games, Twitter’s partnership with the NFL will give it access to popular highlights, previews, and pregame commentary; and shows such as Verified, developed in conjunction with The Players’ Tribune, will drive interactivity by having players answer questions from fans live on Twitter.

Additionally, along with developing a 24/7 live news show with Bloomberg, Twitter is adding more news-focused shows from The Verge, BuzzFeed, and Cheddar. Twitter will also stream selected concerts live with Live Nation.

The mix of content is certainly likely to appeal to a wide demographic and generate advertising revenue, as long as Twitter can prove to advertisers it can continue to show growth and engage audiences. One of the big questions is whether live video content fits with Twitter’s short-form, real-time, current-affairs-based engagement with the audience and whether Twitter in general will be able to continue to grow audience levels or will simply stagnate. On both of these issues only time will tell.

Finally, YouTube seems to be falling far behind in terms of exclusive content and partnerships. In fact, YouTube Red is not even a factor at the moment as it hasn’t yet had a launch day set for Europe. Some commentators suggest it never will.

Challengers Are Circling

The year ends with Netflix and Amazon as well-established platforms, with both of them in relatively strong and certainly profitable positions. However, the challenges in 2018 come from a range of different areas, and certainly a service from Disney, Apple, or Facebook could upset the status quo. While each of the challengers’ slightly different approaches has significant potential, Netflix and to a slightly lesser extent Amazon remain significant opponents, and the other platforms may have to offer something unique to clearly differentiate themselves and to make inroads into the market. For Disney this could purely be about content; for Apple, premium VOD; and for Facebook, the level of interactivity it could offer content creators. The question is, will any of these new platforms offer enough of an alternative in terms of content to make an impact?

With the increasing availability of exclusive content on each platform, we may well reach the end of 2018 and discover that, although many of us have cut the cable, we have simply exchanged one large pay TV package for a series of smaller subscriptions and rentals. The result of this could be an emergent but bespoke mix of programming that’s unique to each user, creating a more tailored, though no less expensive, experience.

[This article appears in the Spring 2018 issue of Streaming Media European Edition.]

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